Hill Country's downtown — La Cantera

Construction has started on The Residences at La Cantera, a mixed-use development near the Shops at La Cantera that will incorporate 323 apartments and more than 4,000 square feet of retail space. Future phases will include a hotel, office and retail space and additional multi-family units. USAA Real Estate Co.

Construction has started on The Residences at La Cantera, a mixed-use development near the Shops at La Cantera that will incorporate 323 apartments and more than 4,000 square feet of retail space. Future phases

Construction has started on The Residences at La Cantera, a mixed-use development near the Shops at La Cantera that will incorporate 323 apartments and more than 4,000 square feet of retail space. Future phases will include a hotel, office and retail space and additional multi-family units. USAA Real Estate Co.

Construction has started on The Residences at La Cantera, a mixed-use development near the Shops at La Cantera that will incorporate 323 apartments and more than 4,000 square feet of retail space. Future phases

In the coming years, the area around The Shops at La Cantera will become more than just a destination for shopping and dining.

USAA Real Estate Co. and Houston-based Cambridge Development Group have started construction on The Residences at La Cantera, a high-end mixed-use project that will incorporate 323 apartments and more than 4,000 square feet of retail space, said Bruce Petersen, executive managing director of real estate investments for USAA Real Estate Co.

The project is the initial phase of Town Center at La Cantera, a multiple-phase project on about 150 acres that will include a hotel, office and retail space and additional multifamily units. The Residences will be located on a 5-acre swath of land east of the shopping center 6215 Via La Cantera.

“We're convinced that this type of location will have tremendous appeal for not only San Antonians but Mexican nationals,” Petersen said.

The project cost for The Residences will be close to $50 million, and the development is expected to be complete by spring 2014, Petersen said.

There wasn't a timetable for the start of the project's other phases.

Although that section of the city is best navigated by car, the property will favor a more walkable environment, with direct access to the shopping center. Town Center also will have a 3-acre park that will connect to the Leon Creek hike and bike trails, Petersen said.

“This will be a dense development that lends itself to a walking community,” Petersen said.

The retail space will be situated on the ground floor of the four-story building. No retail leases have been signed, but Petersen said that possible tenants could include a coffee shop.

The project will offer studio, one-, two- and three-bedroom units that range from 553 square feet to 1,785 square feet. Amenities will include hardwood flooring, stone countertops, clubhouse, cyber cafe, fitness center with yoga studio and a resort-style pool with Jacuzzi. There also are plans for a rooftop terrace with fire pit and outdoor kitchen.

Rental rates for the apartment units have not been determined, Petersen said. Aside from downtown, the far Northwest Side has the highest average rental rate at $1.21 per square foot, according to data from Austin Investor Interests, a market research firm.

Despite the high leasing costs, Dan Markson, senior vice president at commercial real estate firm NRP Group, said that there is demand for multifamily living in the area known for its high-end, single-family luxury homes. NRP is even developing its own multifamily project, Belleza at Cresta Bella, just north of La Cantera. Also nearby is Wereldhave's Éilan, a mixed-use development with more than 500 apartments.

The area's residential appeal hinges on the availability of several retail and entertainment spots tied together with the scenic Hill Country surroundings, Markson said.

“La Cantera is an exciting urban experience,” said Markson. “If you want to live in the Hill Country, this is your downtown. We recognize that a large segment of the market wants to live that Hill Country lifestyle. People want an urban experience in terms of socializing, but when they go home, they want the Hill Country views and privacy.”